By: Walter J. Liszka
Starting in January 1, 2008, through March 27, 2010, the National Labor Relations Board - the governmental agency created in 1935 to administer the National Labor Relations Act governing relationships between employers and its employees and unions - has decided almost 600 cases through the actions of two Board members. On June 17, 2010, the United States Supreme Court, in a 5 to 4 decision in the case of New Process Steel, LP v. National Labor Relations Board, decided that the Board had exceeded its authority in these decisions and invalidated the decisions of all of those cases. The Board must now reopen these cases and hopefully decide them with at least a three member panel making the decision.
As a bit of background, the National Labor Relations Board is traditionally composed of five Board members, all of whom are nominated by the President of the United States and subject to confirmation in the Senate. Mainly due to "purely political reasoning," former President Bush was unable to get his nominees for the Board ratified by the Senate in his final year of office. In fact, until he accomplished it through two recess appointments, President Obama was also unable to get his recommendations confirmed by the Senate. As an aside, any business that would attempt to function this way would certainly find its way to the steps of the Bankruptcy Court and, more probably, to destruction.
In reaching its decision to invalidate the findings of the Board in these cases, the U. S. Supreme Court basically did a very strict interpretation of the legislation issued by Congress under the provisions of the National Labor Relations Act that defines a quorum of the National Labor Relations Board. The specific provision involved was Section 3(b) which states as follows:
The Board is authorized to delegate to any group of three (3) or more members, any and all of the powers it may itself exercise. ... A vacancy in the Board shall not impair the right of the remaining members to exercise all of the remaining powers of the Board and three members of the Board shall, at all times, constitute a quorum of the Board except that two members shall constitute a quorum of any group designated pursuant to the first sentence hereof. ...
[29 U.S.C. § 153(b)]
The Court specifically held that the aforementioned provision authorized the Board to delegate its power to a three member group, but held that when the actual Board's membership fell to only two numbers (the designated three membership group of members "Lieberman, Schaumber and Kirsanow" ended when Kirsanow's appointment terminated as of December 31, 2007), the Board could not continue to issue decisions since there did not exist an actual three member quorum. The Court interpreted the three member quorum as a requirement to exist continuously as a three member group and that this was the only possible way to give meaningful effect to the provisions of §153(b).
The Court decided that those provisions of §153(b) contained four separate and distinct requirements: 1) a delegation clause; 2) a vacancy clause, which provided that a vacancy in the Board shall not impair the rights of the remaining members to exercise their powers; 3) a quorum requirement which mandated that three members of the Board at all times constitute a quorum of the Board; and 4) the group quorum provision which provides that two members shall constitute a quorum of any delegee group from the three members.
To buttress its finding and position, the Court also held that if congressional intent as clearly set forth in the statue was to authorize only two members of the Board to act alone on an ongoing basis, Congress could have merely continued the provisions of the original two member Board that had existed prior to 1946 or, in the alternative, provided for a delegation for Board authority to groups of two members rather than three members. The Court, in making this far reaching decision, has at least set forth the position that "politically motivated" action by the Senate is not an excuse to not comply with the law. Federal agencies seemingly cannot avoid their obligations or run short staffed because of politics.
While some may question the importance of this decision, suffice to say that any employer who has been impacted and/or affected by a Board decision from January 1, 2008, through March 27, 2010, now has the right to question the validity of that decision and I am fairly certain that a rapid and ever growing increase in litigation will be an outgrowth of this case.
As an aside, it is extremely interesting that the Supreme Court's liberal and retiring Justice, John Paul Stevens wrote the opinion of the Court in this matter and was joined by Chief Justice John Roberts, and Justices Antonin Scalia, Clarence Thomas and Samuel Alito in the 5 to 4 majority.
